Traders will have a close eye on Tivo, Inc. (NASDAQ: TIVO) Thursday following news after the close that Google (Nasdaq: GOOG) is selling its Motorola Home business to Arris Group Inc. (Nasdaq: ARRS) for $2.35 billion. With TIVO currently in litigation with Motorola, this could have major implications for the company.

On one hand, Google is providing a significant level of indemnification to insulate Arris from any monetary damages that may arise as a result of the litigation, analyst at Janney note. It could also push Google into a quicker settlement. "We believe GOOG is now more motivated to settle because they have provided the buyer with indemnification and will have to bear the burden of any damages themselves," Janney's Tony Wible said. "With the claims construction out, and skewed in TIVO's favor, we believe the window for settlement negotiations is now open. While GOOG could delay settlement, it is in their interest to minimize damages and retain as much of the purchase price as possible."

Wible also comments that the transaction may provide a path for TIVO to broaden scope of damages to ARRS boxes. "Under this scenario, ARRS does not have indemnification from GOOG for any resulting damage," he said. "While it is not clear that ARRS is protected in the event of an injunction, the twist is that GOOG may get the final say on taking legal risk. ARRS does not appear to have a formal mechanism in the agreement to force GOOG into a settlement to avoid an injunction."

While a settlement is now more likely, a takeover of TiVo by Google appears completely off the table now. This could move some fast money out of the stock that were betting on a Google takeover of the company.